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New rules for the posting of workers to/ from Romania

On 20.05.2017, a new Romanian law regarding the international posting of workers has been published. It is of relevance for all companies within the EU, the EEA and Switzerland which provide international services implying the posting of workers to or from Romania.

Regulation

The Romanian Law 16/2016 “concerning the posting of workers within the framework of the provision of transnational services” has been published on 21.03.2017. As of 20.05.2017, it will replace Law 344/2006, which had been passed shortly before Romania’s EU adhesion in order to implement the EU “posted workers directive” 96/71. It will hereinafter be referred to as the “Posting Law”.

Main purpose

Just as the old law 344/2006, the Posting Law mainly aims at implementing the posting directive. The latter’s purpose is to protect workers from one member state who are temporarily sent by their employer to work in another member state. In a nutshell, to this end, it obliges every member state to guarantee employees posted on its territory from the EU/ the EEA or Switzerland – whatever the law applicable to their employment relationship – a “hard core” of rights which are mandatory in this state. These rights refer to:

(i) maximum work and minimum rest periods

(ii) minimum holidays

(iii) minimum wage, including overtime rates

(iv) conditgiosn of hirig-out of workers

(v) health and safety at work

(vi) protection of women who are pregnant, recently gave birth, children and young people

(vii) non-discrimination.

Content

The new Posting law is about three times as comprehensive as the old law. It applies to “inbound cases” (posting of workers to Romania) as well as to “outbound cases” (posting of workers from undertakings headquartered in Romania to an EU / EEA member state or Switzerland). Generally speaking, the main definitions and principles have been maintained.

New rules

The main new regulations refer, inter alia, to

Responsibilities of the Labour Inspection

Romanian labour authorities are compelled to verify all facts which characterise an international posting of workers, in purpose of preventing any abuse of the law. Such controls aim, inter alia, at verifying to which extent

The undertaking carries out significant activities, exceeding the mere administration, in its state of origin

Workers are indeed posted to Romania for a temporary period

The usual characteristics of a posting (direction right of the employer, remuneration, etc.) are fulfilled in practice, apart from the contractual provisions.

"Principle of favourability"

Should the legislation applicable in the state from which an employee is posted contain provisions which are more favourable for the employees, then such more favourable conditions shall take precedence. This applies expressly both in inbound and in outbound cases.

Administrative cooperation

Most new provisions have been introduced in the sector of cooperation between the authorities. Among these, we mention that

In outbound cases, should the labour inspection receive information requests from foreign authorities, it is compelled to give such information and responsible for controlling the posting enterprise (inter alia with respect to its establishment in Romania, its former behaviour, abuses of international posting, etc.)

In inbound cases, the labour inspection verifies the observance of the obligations related to the posting of workers to Romania and informs the authorities from the state of origin about potential breaches

In inbound cases, the employers’ obligations to provide documentation and evidence have been expanded – even after the termination of a posting

Rights of posted employees

Employees posted to Romania are expressly entitled to invoke any violation of their rights by their foreign employers before the Romanian labour inspectorates and courts of law. Even trade unions may exercise such right. Unilateral measures by the employee for such reason are unlawful and will be sanctioned with fines amounting up to 100.000,- RON (ca. 25.000,- EUR).

Subcontractors

Companies which employ subcontractors for certain activities (enumerated in the law) will be liable “jointly and severally or in lieu of” their direct subcontractors for outstanding claims of their employees for minimum salary and other rights. They may free themselves from such liability by proving to have requested a series of documents regarding the observance of the posting law from the subcontractor.

Cross-border debt recovery

Claims resulting from administrative sanctions imposed for the non- observance of applicable laws, e.g. fines, will be enforced internationally. To this end, comprehensive provisions regarding administrative assistance and procedures have been introduced. In Romania, the enforcement falls under the competence of the finance administration ANAF.

Administrative regulations

As usual, details regarding procedures, sanctions and other aspects shall be published in further administrative regulations.

Summary

Form a material point of view, the legal framework has not been changed substantially. From a formal point of view, however, the requirements will increase – especially in inbound cases and in particular when subcontractors are employed. Details will be published, as always, in administrative regulations.

In the end, it is worth mentioning that the Romanian employment legislation still knows different definitions of “posting (detaşare)”. While the Labour Code contains general rules regarding the posting as a unilateral measure of the employer (whereby the control over the posted employee is transferred to another employer), the Posting law uses the same term in another context (international posting between EU and EEA member states or Switzerland, which implies that the employer keeps the control over the posted employee) and provides different legal effects. In order to solve this problem, caused by the implementation of the Posted Workers Directive by Romania, the posting of workers within the EU / EEA / Switzerland must be regarded as a special kind of posting outside of the framework of the Labour Code. This seems hard to understand both from a theoretical and a practical point of view.